Direct File allows taxpayers to file their returns directly to the agency for free.
IRS Direct File has been in the crosshairs of the second Trump administration for the past few months, but the latest details of the GOP’s budget proposal have made its potential demise a lot more concrete.
Direct File is an online program offered by the IRS that lets you file your income tax returns directly to the agency for free, instead of paying for an accountant or paid tax service like H&R Block or online tax software. Spinning out from the Inflation Reduction Act and signed into law by former President Joe Biden in 2022, the program launched in 12 states during the 2024 tax season. The IRS later said that it was used by 140,000 people during that pilot run.
It expanded to 25 states for the 2025 tax season, but despite its “enhanced” offerings, Direct File was already under a cloud of uncertainty as it became a target for President Donald Trump’s incoming administration and its extensive plans to cut government spending.
In February, Elon Musk — the Tesla CEO and leader of the Department of Government Efficiency that’s responsible for many of the current Trump-era cuts to the federal government — claimed in a post on X that the Direct File office had been “deleted,” though the program remained in operation.
Now, the proposed 2025 federal budget, backed by Trump and crafted by Republicans in Congress, has laid out the possible end of Direct File in explicit terms. If passed into law and signed by the president, the budget calls for the Treasury Department to end the program within 30 days after the bill is signed, if not sooner.
After that, the department would be directed to establish “a better public-private partnership between the IRS and private-sector tax preparation services,” though details about what that might look like and a timeline have not been shared.
Although most taxpayers have already filed their 2024 tax returns, if you filed an extension or live in an area with an extended deadline, you have other options. If Direct File is shut down, check to see if you can file for free through IRS Free File, Cash App Taxes or a free tier of online tax software.
The Treasury Department did not respond to CNET’s request for comment.
